Bipartisan Buy-in on Final Stimulus Bill Could Hinge on Jobs

February 12, 2009 at 6:10 PM EDT

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Lawmakers continued Thursday to nail down the details of the economic stimulus bill in a push toward a final vote. Google CEO Eric Schmidt and Minnesota Gov. Tim Pawlenty examine the bill's effectiveness and react to news of Judd Gregg's withdrawal from the Cabinet.

TRANSCRIPT

JUDY WOODRUFF: Well, Sen. Gregg’s withdrawal came as House and Senate leaders tried today to herd the stimulus bill toward final passage. At the same time, they faced complaints from both sides of the aisle.

NewsHour congressional correspondent Kwame Holman has our report.

KWAME HOLMAN: Democratic leaders hope to get the bill to President Obama by Monday, so they worked to nail down details and set up final votes tomorrow for Saturday.

Overall, the compromise measure would cost $789 billion: 64 percent, just over $500 billion, would go towards spending programs, the rest, 36 percent, or about $280 billion, would be tax cuts.

SEN. MITCH MCCONNELL (R-KY), Senate Minority Leader: We haven’t seen all the details of the deal between House and Senate Democrats, but some of the early reports suggest this bill has only gotten worse.

The president has asked for 40 percent in tax cuts; the bill falls short of that. But congressional Democrats did make sure it contains billions in questionable, non-stimulative projects. And the most highly touted tax cut in the original proposal now translates into $7.70 a week for middle-class workers.

SEN. DICK DURBIN (D), Illinois: Why did the amount of tax cuts for families go from $500 to $400? Well, it was because the Republican senators said, “We want to bring down the cost,” and that was one of the ways we did it.

It’s completely inconsistent. Their arguments are completely inconsistent. And I think the American people know it. They want Congress to come together and find solutions. They want partnership, not partisanship. They want us to stop squabbling and start working together.

That’s what we’re trying to do, even today, and it’s hard. It’s difficult. We’re trying to find the votes to make this happen. It’s essential that we do.

KWAME HOLMAN: Not all Democrats were entirely satisfied. Some in the House objected to cutting proposed aid to states and schools by nearly half to $54 billion in the latest bill. But in the end, they said, they’re ready to vote yes.

REP. YVETTE CLARKE (D), New York: Everybody has a wish list. I don’t know when you were a kid if you believed in Santa Claus, but I put a lot of faith in the fact that my list would go in and I would get everything on my list. Well, oftentimes, that didn’t happen. But at the end of the day, I was grateful for what I had, and it made me a stronger person for it.

KWAME HOLMAN: The issue of jobs was another flashpoint. Democrats and Republicans sparred over whether this bill will save or create 3.5 million jobs, as President Obama says.

REP. MIKE PENCE (R), Indiana: We’re all committed to passing legislation that will jump-start this economy. Republicans simply believe that the bill that is moving toward the floor will not stimulate more jobs; it’ll simply stimulate more government and more debt.

The overwhelming majority of the spending in this bill represents a wish list of longstanding liberal spending priorities that will have little to do with creating jobs.

REP. JOHN SARBANES (D), Maryland: This is going to create a lot of jobs. It’s going to save jobs directly, but it’s going to create jobs. Infrastructure projects in there that are ready to go, that’s going to create jobs. Investing in new energy technology, that’s going to create jobs. Keeping the demand up through some of these tax cuts, that’s going to mean that more businesses are going to stay in operation. That’s going to save jobs.

KWAME HOLMAN: President Obama also focused on jobs in Peoria, Illinois, home of the construction equipment giant Caterpillar. The company recently announced it’s cutting more than 20,000 employees.

BARACK OBAMA, President of the United States: When a company as good, and successful, and efficient, and lean and mean as Caterpillar is cutting back production and shedding jobs, that means we’re not building up this country. It means we’re not building new homes and offices or rebuilding crumbling schools and failing infrastructure.

In short, it means we’re standing still. And in this new global economy, standing still is the surest way to end up falling behind. Standing still is not an option. It’s not who we are; it’s not who we have to be.

KWAME HOLMAN: The president’s visit to Caterpillar came as the Labor Department reported today new claims for unemployment benefits fell last week, but they remain near a 26-year high.

Bipartisanship hard to implement

Tim Pawlenty

Governor of Minnesota

I think Sen. Judd Gregg came to the conclusion that his policy differences, however, were just too remote or too vast, the gulf was too vast between he and President Obama, and he couldn't meaningfully represent the administration because of that.

JUDY WOODRUFF: We get two views now on whether this stimulus compromise will create the jobs that have been promised, as well as some reaction to Judd Gregg's withdrawal.

It comes from Eric Schmidt, the chairman and CEO of Google. He's one of several business leaders who met with President Obama recently and advised him during the transition. And Tim Pawlenty, the Republican governor of Minnesota.

Thank you both for being with us.

And, Gov. Pawlenty, to you first. What do you make of this late-breaking news that Sen. Gregg has withdrawn from consideration over, I guess, what he's describing as fundamental differences over some issues?

GOV. TIM PAWLENTY (R), Minnesota: Well, first of all, I applaud President Obama for his willingness to appoint or consider appointing Sen. Gregg to an appoint position, the commerce position. It was a gesture of bipartisanship, and I think that's appreciated.

I think Sen. Judd Gregg came to the conclusion that his policydifferences, however, were just too remote or too vast, the gulf wastoo vast between he and President Obama, and he couldn't meaningfullyrepresent the administration because of that, and he withdrew, which was the honorable thing to do. So it's an unfortunate situation, but at least they got it sorted out now before the stakes were even higher.

JUDY WOODRUFF: Eric Schmidt, there are already two Republicans in the cabinet. Is it a mistake for the president to try so hard to get more people from the other party in his cabinet?

ERIC SCHMIDT, Chairman of Google: Actually, I think it would be better to have as many Republicans as he possibly can get in his cabinet. We would be better off as a country if we had the best and most able citizens representing us and running the government, regardless of their political party.

It's sad that he chose to get out, but perhaps there are other people who are willing to sort of work in that kind of culture. I think it's good for mixing.

JUDY WOODRUFF: But it is turning out to be tougher than expected, Eric Schmidt.

ERIC SCHMIDT: Well, you know, our Washington culture is so politicized that an awful lot of the debates become political rather than trying to solve solutions. I think all of us as citizens would benefit from people sitting down, putting aside their differences, and saying, "Look, what's the way to get things going again? How do we get things moving? How do we ignore what happened in the past? Let's get this fixed now."

JUDY WOODRUFF: Is that a lesson learned from all of this, Gov. Pawlenty?

GOV. TIM PAWLENTY: Well, I think the lesson that we learned is the country's in big trouble, and we need to come together as Republicans and Democrats and as Americans, and find solutions that will work, which kind of leads into discussion about the stimulus bill.

It seemed liked it had a good intent behind it, but in the eyes of many Republicans wandered beyond the original intent into some things that perhaps weren't properly focused on stimulus and more properly in the category of further spending or additional spending.

Differences on what's 'stimulative'

Eric Schmidt

Google

I think we're going to see how quickly it happens. The money has to go through approval; it has to go through all the normal agencies; it has to be done lawfully.

JUDY WOODRUFF: Well, let me ask you about that. What do you mean that it wandered off into the area of too much spending? What do you mean?

GOV. TIM PAWLENTY: Well, Judy, I think most Republicans and Democrats could agree that one way to effectively and quickly stimulate the economy would be tax cuts. And the bill includes tax cuts, but perhaps not as much as some Republicans would like, I would like.

But also the focus that we could get bipartisan agreement on would be on bread-and-butter infrastructure, like roads and bridges, like, perhaps, some of the technology initiatives. But then the bill really went well beyond those two or three categories into kind of a whole set of -- a whole array of spending initiatives that many believe are not stimulative, or at least not primarily stimulative, and that's where the controversy set in.

JUDY WOODRUFF: Eric Schmidt, is that how you see what's happened with this stimulus package, that it's wandered off into other areas?

ERIC SCHMIDT: The governor's correct that there were some extra things in the bill, but it was still pretty much a majority of -- a minority of what was in the bill.

The vast majority of the bill and what's before the Congress now is infrastructure, Medicare, Medicaid, dealing with things like the alternative minimum tax, significant tax breaks, roughly $280 billion of tax and tax credits of one kind or another, all of which, from a Republican perspective, are stimulative, as well as from a Democratic perspective.

The other issue, of course, is that there's quite a bit of infrastructure upgrades which are needed across the country and a lot of aid to the states. The most important thing is that the government chose to do things that would occur quickly.

So there were a lot of important long-term things that they couldn't fund. I think they've done a good job of mixing and matching to get the right combination now.

JUDY WOODRUFF: When you say "quickly," how quickly do you think the country can expect to see some turnaround in this economy?

ERIC SCHMIDT: Well, on the infrastructure side, the design was everything had to be fully spendable within two years, which is actually hard when you're trying to spend $100 billion improving schools, and federal buildings, and those kinds of things. Nevertheless, their plan says that about 75 percent of the money will be spent in the first 15 months.

Beyond that, I think we're going to see how quickly it happens. The money has to go through approval; it has to go through all the normal agencies; it has to be done lawfully.

The other aspect, of course, of this is the financial restructuring and successor to TARP, which is also unveiled this week, which is hand in hand with the stimulus bill to credit get moving again.

JUDY WOODRUFF: Gov. Pawlenty, we just heard Eric Schmidt saying the vast majority of the bill is infrastructure and then he listed other projects, other initiatives -- I think he said Medicare, Medicaid, issues or projects that the states need help on. Why aren't those stimulative?

GOV. TIM PAWLENTY: Well, two things. And I certainly have a great deal of respect for Eric Schmidt, and he's got a wonderful voice in this debate and has been very helpful, I think, in framing these issues.

But as to the infrastructure piece, the news reports I read today said the grand total of the infrastructure is a bit over $100 million, with roads and bridges only being $46 million, other categories of infrastructure getting you up to that $100 million total against a now nearly $800 billion bill. So it's not even close to half, infrastructure is not even close to half or a significant overall percentage in the bill.

And then, beyond that, we're not saying -- I'm not saying that all of this bill is bad ideas. We're just talking about the fact that some of it is really not immediately stimulative. And if we want to debate, for example, STDs or smoking cessation or health care reform, those are good and legitimate issues, but probably should be handled in a separate bill, particularly when you're trying to get bipartisan buy-in. And that's one of the main objections.

JUDY WOODRUFF: Eric Schmidt, how do you respond to that criticism?

ERIC SCHMIDT: Well, I actually agree with the governor, and those issues were actually taken out of the bill in conference. And now, in fact, the bill does not include most of those facilities.

It's important to remember that, as I mentioned, about $500 billion are things which involve direct payments to the states, to local government, things like hiring policemen, that sort of thing, as well as infrastructure, and the infrastructure number is about 150, if you add it all up.

The sum of all that, because it's early and quick, is, in fact, stimulative. The other third is tax breaks of one kind or another, especially to the middle class, where we think most of the job growth will really occur.

States welcome money from bill

Tim Pawlenty

Governor of Minnesota

I do think the area for bipartisan consensus really was some form of tax cuts plus some form of traditional infrastructure....So if the bill would have focused more on just those two things, I think more Republicans would have been supportive.

JUDY WOODRUFF: Gov. Pawlenty, are you saying that you simply don't see those things as helping the economy, the things that Mr. Schmidt just ticked off?

GOV. TIM PAWLENTY: No, Judy. I do think the area for bipartisan consensus really was some form of tax cuts plus some form of traditional infrastructure, along the lines that Eric mentioned. So if the bill would have focused more on just those two things, I think more Republicans would have been supportive and you would have had less concern and a more bipartisan result.

And I think the unfortunate part about it is the remaining portion of the bill -- you know, that remaining third that was more controversial -- I don't think would have been that hard or difficult to fix to get some more Republicans to join. So it's disappointing in that regard.

JUDY WOODRUFF: But you've also said, Gov. Pawlenty, that you do plan to take any money that's directed to your state of Minnesota that comes out of this, assuming it passes. Why, if you don't think the bill is the right idea?

GOV. TIM PAWLENTY: Well, because of this. Minnesota is a major contributor to the federal government. For each dollar that we send to Washington, Minnesota only gets about 73 cents back. So we're not going to be feeling too bashful about accepting our share of the money, because we've paid for it and then some.

JUDY WOODRUFF: But is there not a little bit of hypocrisy there to say you're against it, but on the other hand you'll take it?

GOV. TIM PAWLENTY: Well, we've expressed concerns, as I have throughout the process, about how the bill might be better, how it might be able to garner more bipartisan support. Those suggestions, at least from my standpoint, weren't embraced or adopted.

But I don't think there's hypocrisy in saying we're going to accept our fair share of it just because we expressed our concerns. I think part of democracy is having a good debate, having a voice in the debate, and sometimes you're going to be heard, and those things are going to be incorporated, and sometimes not. But I don't think that should prohibit us from accepting our share of the money, particularly when we've paid more than our share.

Confidence is now key

Eric Schmidt

Google

My view is that the government needs to get three things happening fairly quickly: private sector creating new jobs; some solution to the credit crisis; and some solution to the mortgage crisis.

JUDY WOODRUFF: Eric Schmidt, what do you look now from the Obama administration? Now that this legislation is moving toward passage, what do you look for next?

ERIC SCHMIDT: My view is that the government needs to get three things happening fairly quickly: private sector creating new jobs; some solution to the credit crisis; and some solution to the mortgage crisis.

The sum of the stimulus bill, plus the proposed financial changes that are now making their way through the system this week, are attempts to do that. A lot of people are concerned that, even with $2.5 trillion, if you add it all up, in financial guarantees for the bank and banking sector, plus another $800 billion of spending in the stimulus bill, that that's not, in fact, going to be enough.

So from my perspective, the most important thing to do is to get this to happen quickly. It's not perfect, as the governor points out. Let's get it flowing, and let's get confidence back.

A lot of this is now about people believing that their jobs are safe, that they're not going to lose their homes, that they can go out and start spending again, and then the cycle returns, and it returns quickly. And that's the great part about America.

JUDY WOODRUFF: And, Gov. Pawlenty, do you think there will be improved confidence as a result of this legislation?

GOV. TIM PAWLENTY: I do think you're going to see a positive effect of the legislation. It's not perfect, but the types of effects that Eric just described are going to happen, we hope, both financially and psychologically. And this battle was fought. It's now -- the votes are going to have been taken here shortly. And hopefully we can move on and work on other things that the country needs to have addressed.

JUDY WOODRUFF: And just quickly, Governor, do you expect the president will get greater Republican support for future initiatives?

GOV. TIM PAWLENTY: Well, it would depend on what those initiatives are, of course. And it's hard to predict without knowing what's coming up next in the queue.

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